West Lebanon — Improved technology, expanded manufacturing and skilled installation are making solar power more affordable for home use, and government incentives are bringing the amortized monthly payments of units to about the same as electric bills.

Even in the often-cloudy Upper Valley, more efficient solar panels allow contractors to size units so they can provide all or most of the annual electricity needs of a home, and the investment in residential solar now is estimated to be repaid in about seven years, rather than the 20 it took a few years ago.

Behind the lower prices, which some experts say are about one-third of what they were in 2008, is not only more efficient equipment, but also the drop in the cost of key materials as well as better manufacturing and installation methods.

“One of the most dramatic things that has happened is the drop in the price of silicon, which is used in solar panels,” said Charles R. Sullivan, an associate professor of engineering at the Thayer School of Engineering at Dartmouth, who specializes renewable energy.

“And the industry has gotten more mature. There have been vast improvements in the production process, and the technology is helping maximize the efficiency,” Sullivan said.

Improved technology is helping systems be more efficient in the Northeast and elsewhere, but even the older solar panels work pretty well here, Sullivan said, noting that Thayer researchers were surprised by the results of a study tracking the performance of a system that was installed at the school in 1996.

“It put out more than the predictions,” about two-thirds of what a similar system would have done in sunnier parts of the country.

Residential and commercial solar use is growing more rapidly in the darker Northeast than in more sunny areas because of the high cost of electricity in this part country, said James Resor, chief executive officer of GroSolar, a national company with headquarters in Wilder.

“We’re seeing tremendous growth in Vermont and on the East Coast,” Resor said. “It’s much more feasible in the Northeast than in the South, for example, where they use cheap coal, dirty to generate electricity.”

Most of the systems installed in New Hampshire and Vermont are connected to the grid with a net metering system that gives customers credits that can be applied to utility bills for up to 12 months. In the Northeast, the credits built up during the sunny summer months reduce bills during the darker winter when the panels are at their lowest production.

Solar collectors not connected to the grid provide free power when the sun is out, but they require batteries for electricity storage — not used with net metering — and in many cases back-up generators to cover the darker months. And homeowners living off the grid also must manage their usage carefully to keep the lights on, and often are required to give up some non-essential appliances.

“It’s a little like living on a sailboat, I would think,” said Rebecca Bailey, who has lived off the grid for more than 20 years with her husband Jim Schley and family in Strafford.

“We don’t have a dishwasher. We do have computers, but I’d kill for a toaster. I really miss that,” Bailey said.

In many cases, the most expensive part of a solar installation is the labor, which can run half as much as the hardware, and users can reduce those costs dramatically by doing the work themselves, Sullivan said, adding that not everyone has the skills necessary for the job or wants to put up with the inconvenience.

There are, however, online and video courses that provide detailed instructions for installing manufactured panels and for building solar panels using materials that can be purchased at hardware stores along with readily available solar cells and hardware.

Electric utility bills in Vermont and New Hampshire range between $700 to $900 per year. An installed solar photovoltaic, roof-mounted system costing about $7,100 after rebates, incentives and tax credits can provide a utility bill savings of $923 a year, said Nathan Kleinschmidt, sales manager for Home Comfort Warehouse, a White River Junction company that installs solar units.

In both states, there is financing available that covers 100 percent of the cost of solar units. A loan on units that produce enough electricity for a $1,000 annual savings would have monthly payments of about $55, or $660 per year.

All-Earth Renewables, a national developer and manufacturer of solar panels based in Williston, Vt., has started a new leasing program pegging the rent of its units to its estimated production.

For example, a homeowner with an electric bill of $100 per month would lease panels that would produce enough power to meet the household need over a year, reducing the electric bills to zero and the rent for the units would be a fixed at $100 a month, said Andrew Savage, company director of communication and public affairs.

Included in the rent is the complete installation and maintenance of the units, which feature the company’s pole-mounted, dual-axis system that uses a GPS to follow the sun. The tracking units have been proven to be as much as 45 percent more efficient than fixed, roof-mounted systems, Savage said.

“The customers benefit from the utility savings and knowing that they are doing something that’s good for the environment at no extra cost. They are locked into a fixed rent and won’t have to pay higher prices when the utility bills go up. And after seven years, they can buy the system, which will last another 20 or more years at a reduced cost,” he said.

Although he had used solar hot water for almost two decades, Bob Walker just put in a photovoltaic system at his Thetford home a little more than a year ago when the prices came down.

“Before we put it in, our bills were running $40 to $50 a month. Since then, we’ve had bills of $20, but I think we’re going be pretty close to zero for the year. We’re very happy, and I think we may even add more panels.

In the future, solar photovoltaic systems probably will become even cheaper because of new materials that will replace silicon, said Thayer Assistant Professor of Engineering Jifend Liu, who is working on thin-film solar cells using nano particles that has the promise of cutting costs in half.

“We’re looking at very thin coatings that will transfer heat at high temperatures and will be much efficient,” he said.

The market is growing rapidly and the research is expanding, Liu said. “We’re making technical advances in engineering and improving battery storage is making progress. I think the future is bright.”

Warren Johnston can be reached at wjohnston@vnews.com or 603-727-3216.